How much is the inventory loss due to the flood

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Reference no: EM132615338

On October 1, 20x1, the warehouse of ABC co. and all inventories contained therein were damaged by flood. Off-site backup of database shows the following information:

Inventory, Jan 1 = 10,000

Account Payable, Jan 1 = 3,000

Accounts payable, sept 30. = 2,000

Payments to suppliers = 50,000

Freight in= 500

Purchase Returns = 500

Sales from January to Sept. = 80,000

Sales Returns = 5,000

Sales Discounts = 2,000

Gross Profit based on Sales 30%

Additional information:

Goods in transit as of October 1,20x1 amounted to 1,000

Cost of goods out on consignment is 1,200

Materials damaged by flood can be sold at salvage value of 1,800.

Problem 1: How much is the inventory loss due to the flood?

A. 4,400

B. 2,500

C. Answer not given

D. 4,900

E. 3,000

Reference no: EM132615338

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